Is Deutsche Science and Technology A (KTCAX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Sector - Tech fund category, Deutsche Science and Technology A (KTCAX) could be a potential option. KTCAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Tech funds is an area filled with options, and KTCAX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
DWS is based in New York, NY, and is the manager of KTCAX. Deutsche Science and Technology A made its debut in September of 1948, and since then, KTCAX has accumulated about $1.11 billion in assets, per the most up-to-date date available. The fund's current manager, Sebastian Werner, has been in charge of the fund since December of 2017.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 28.26%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 28.32%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of KTCAX over the past three years is 20.68% compared to the category average of 17.08%. Over the past 5 years, the standard deviation of the fund is 17.33% compared to the category average of 14.26%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. KTCAX has a 5-year beta of 1.02, which means it is likely to be as volatile as the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a positive alpha of 9.33, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, KTCAX is a load fund. It has an expense ratio of 0.90% compared to the category average of 1.36%. So, KTCAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Deutsche Science and Technology A ( KTCAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Sector - Tech area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into KTCAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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